Data mining emerges as a key differentiator in B2B domain

Tourico’s burgeoning data mining initiative is helping Chinese intermediaries in improving upon their product offering by evaluating travel booking behavior. A detailed look at how business intelligence is paving way for competitive edge in the B2B domain.

ChinaTravelNews, Ritesh Gupta - Tourico’s burgeoning data mining initiative is helping Chinese intermediaries in improving upon their product offering by evaluating travel booking behavior. A detailed look at how business intelligence is paving way for competitive edge in the B2B domain.

Tourico Holidays, a specialist in wholesale travel brokerage, is increasingly counting on the prowess of data mining to add value to their overall offering in China.

The B2B specialist’s Travel Global Systems is minutely scrutinizing the requests that are hitting its platform through a dedicated data mining initiative. This way Tourico is adding a new dimension to its high-volume, wholesale model. The company, which now has a team of computer scientists dedicated to identifying the origin and cause of shifts in travel booking behavior, asserts that this is a novel way of assessing the performance in the wholesale sector of travel.

Clearly, the team is looking beyond the routine proposition - technology connection, content, and rates. The team has been working on its business intelligence software to evaluate future demand for different travel destinations over the past few years. Such predictive analytics revolves around volumes of travel search and booking data.

Efficiency

Today the efficiency that Tourico’s data mining team (comprising 10 data scientists) is targeting has two facets – enhancing pricing and contracting capabilities of the team (negotiations, relevant content depending upon the search for a particular destination etc.), and for the ones who source inventory, providing a constructive feedback and recommendations to let them improve the overall user experience and conversion rate of their respective platforms. From an organization’s perspective, the objective is to pre-emptively react to future spikes in demand. This also complements the business model of Tourico, as being a global distributor it buys its inventory in bulk, typically years in advance.

As for helping OTAs with negotiated rates of Tourico, consider an example. Say there are two OTAs, one from China and one foreign OTA, both targeting same destination for the outbound business. Let’s say the foreign OTA at any given point of time is making better use of the inventory from Tourico, and the Chinese OTA isn’t displaying the best of the properties that are available. So Tourico will proactively inform the Chinese OTA about the potential to target incremental business worth $200,000 per month by listing certain properties. Of course, the OTA controls the user interface or the search results/ recommendations, but Tourico believes such prompt feedback in the form of market intelligence can help the intermediary, which tends to miss out on such content owing to any “technical or marketing” reason.

Source: Tourico

The illustration shows one of Business Intelligence modules Tourico Holidays currently uses. The module gives Tourico an almost live status how the company is doing in multiple KPI’s - as compared to 4 week averages and the past year. It focuses on specific points like: top line, bottom line, bookings, etc. The data can also be narrowed to a single hotel or client. A Tourico employee is in charge of revenue generating sections (Sales and product manager).

Tourico told us that their business intelligence modules cover sales, contracting, automated revenue management and technical aspects of their system (like response time). “We also have simulators that create scenarios on impact of changes in margins and other factors on top line, bottom line, cancelation ratio and even Tourico’s EBITDA,” explained Einat Aviv, Data Mining Team Leader for Travel Global Systems.

In terms of performance in China, Tourico says room nights sold worldwide tripled in Q1 this year, compared to the same time last year, from the China source market – registering over 200% increment. “Our top clients in China increased searches to Phuket, Bangkok and Singapore X 1,000 year-over-year since 2015,” said Aviv, who added that the data science team is trying to understand “exact preferences” and accordingly creates a “target list” to fit their needs. “Our data mining initiative also tells us that the demand is much higher and growing in Phuket, Bangkok and Singapore - causing us to increase our portfolio in those markets.”

Analysis

Aviv shared that Tourico is analyzing “tens of millions of unique client searches per day” from Chinese distributors. The blend of computer scientists and the available BI technology means there is a provision at Tourico to not only build upon historical context, but also anticipate future fluctuations if any in store.

“By breaking down the data and identifying tendencies of our Chinese partners, we are able to better understand and assist them by offering tailored products that will increase their profits. We’re even sending travel intermediaries a comparison in performance vs. comp set (competing or alternate hotels),” shared Aviv.

Tourico says the team is combining intelligence with the data that’s currently available in the travel ecosystem.

“(In addition to Tourico’s own data), We are currently data mining from key Internet sources, including travel aggregate sites that are available to the public, to categorize hotels throughout the world. Utilizing these external big data sets help determine which products share similarities and which will be best for our clients. We can also take our best selling hotels, determine what makes them successful, and find comparable hotels to contract in the future,” explained Aviv.

Is feedback real-time?

“It is not real-time. We are still working on streamlining a feedback process,” said Aviv.

And what about changes in pricing? Talking about complexities associated real-time interactions between booking engines, travel providers, CRS and direct connects, Aviv says firstly it needs to be understood that shoppers don’t like prices that constantly change. “Not when they shop for a camera, bread, milk or even travel. Stable, seasonal rates are much more popular for those who like to plan,” she says. “Frequent changes to rates affect anyone who caches rates. All across the distribution chain - from the inbound bed bank to the overseas wholesaler, travel agent and eventually the consumer,” she said. One needs to wary of changes in pricing, and there is a need to avoid the practice that is similar to a “bait and switch” trick that leaves customers frustrated and disloyal.

Maturity of BI and technology in B2B

The B2B travel distribution is witnessing business intelligence-oriented offerings from various stakeholders. For instance, traditional travel agencies, too, today can avail web-based access to information about booking trends, additional revenue opportunities etc. As for making the most of it, no change to workflow is required by the travel agency.

“Travel e-commerce platforms in China are benefiting from what the likes of GTA and Tourico have to offer. Intermediaries are relying on XML APIs for pricing intelligence, precisely defining the fares, airlines and markets. This helps in fine-tuning of offers, marketing campaigns etc,” shared a source.

As for what is being done to improving speed, response time etc., Tourico shared that there are several factors that set its technology apart from its competitors:

1. By having parallel services, there is no one point of failure and there is load balancing.
2. Tourico can do major software changes without stopping the service to clients.
3. On the data side, the team has in place many monitors that alert a 24X7 team for suspected issues.
4. Tourico says it employs a machine learning technology to detect issues and root out causes at a very early stage.
5. Expanding the Internet Service Provider portfolio – to have better route to various clients and more bandwidth.
6. Adding more hardware to serve better the growing number of requests.
7. Code optimization to reduce the server side response time.
8. Piloting MPLS (Multiprotocol Label Switching is a type of data-carrying technique for high-performance telecommunications networks) as service to enhance the speed.